Investment banker Antonio Weiss has been picked for a Treasury under secretary post
Weiss stands to gain up to $21 million if he leaves his Wall Street firm for D.C.
The information comes from financial disclosure records he filed
The payout has angered some on the left including Sen. Elizabeth Warren
If investment banker Antonio Weiss wins Senate confirmation as a Treasury under secretary, he’ll walk away with a parting payment of up to $21 million.
Talk about a win-win.
The financial services firm Lazard, where Weiss is the global head of investment banking, has agreed to pay him about $16 million in unvested income early and give him between $1 million and $5 million in deferred compensation, according to financial disclosure records he filed with the government ethics office.
The disclosures are likely to add fuel to the fire being stoked by liberal Senate Democrats who are bucking President Barack Obama by opposing Weiss’ nomination – a charge led by Massachusetts Sen. Elizabeth Warren. She argues in part that there are already too many “Wall Street executives dominating the Obama administration, as well as the Democratic Party’s, overall economic policymaking.”
The practice of Wall Street executives cashing out early when they take government jobs drew criticism during last year’s confirmation hearings for the man who might be Weiss’ new boss, Treasury Secretary Jack Lew. When Lew left Citigroup in 2008 and later joined the State Department, he made somewhere between $250,000 and $500,000 in early stock payouts.
Deferred compensation and vested stock options were originally designed to keep talented employees from jumping ship. That’s left people like Heather Slavkin Corzo of the AFL-CIO asking, “Why are we paying these people to leave?”
“Unless it’s just a backdoor way to pay off newly minted government regulators,” she added, “it’s hard to see how it’s in shareholders’ interest.”
In fact, the practice led AFL-CIO president Richard Trumka to write to seven Wall Street players last month. In a letter to Weiss’ firm, he wrote, “Why is it in the interest of Lazard to incentivize such departures? Surely Lazard does not expect favorable government treatment from its former executives.”
And that, of course, is exactly what critics fear.
“The question is why would a company give an executive a special financial reward as they’re about to take a government position. Some people say these policies encourage public service, but we worry that they give financial insiders even more sway over the government. In some ways, these companies are ensuring that they’ll have friends in high places,” said Michael Smallberg of the Project On Government Oversight, a government watchdog group.
Smallberg authored a report last year that found a number of major corporations financially reward employees who go through the revolving door.
Some Weiss supporters say his appointment isn’t a typical revolving door scenario because Lazard isn’t regulated by the recent Wall Street reforms aimed at reining in practices that led to the financial crisis.
A Lazard spokeswoman said Weiss declined to comment and that the firm does not discuss compensation.
Earlier this week, The New York Times’ Andrew Ross Sorkin defended the practice writing, “Wouldn’t it be nice if all private sector businesses offered their employees the opportunity to pursue public service work … without giving up income or other benefits that they may have earned? Of course it would be. Well, that’s what the compensation policies of many of the firms in question do. Frankly, it should be encouraged more broadly.”
But to watchdogs like Smallberg these policies “show how the revolving door is literally written into the pay plans of big companies that already have an advantage over public interest groups when it comes to lobbying and making their voices heard.”